FOCUS DC News Wire 11/5/13

 

 

D.C. television news personality J.C. Hayward served as a paid consultant for one of two companies involved in an alleged scheme to divert millions of taxpayer dollars from Options Public Charter School, according to a court document filed in D.C. Superior Court on Monday.

 

In the document, the D.C. Office of the Attorney General argues that Hayward should not be removed from a case that implicated former managers of Options in an alleged self-dealing scheme. A civil complaint filed in October said that the managers funneled at least $3 million to two for-profit companies they ran, and the complaint named Hayward as a defendant in her role as chairwoman of the school’s board of trustees.

 

As the school’s board chairwoman, Hayward allegedly signed contracts and approved bonuses for the former managers, according to the complaint. But her lawyer has claimed that Hayward knew nothing about the contracting scam, and he sought to have Hayward removed from the case, arguing that she “not only did not benefit financially from the alleged scheme but was entirely unaware of its existence.”

 

The new accusation suggests that Hayward approved payments to the companies in her role as chairwoman while receiving money from one of those companies as a consultant. The court document — filed Monday, according to a spokesman for the attorney general’s office — does not say how much money Hayward allegedly received in payments, how long she consulted for the company or what the consulting entailed.

 

Hayward declined to comment when reached by telephone Monday evening. “I really don’t want to respond to anything right now,” Hayward said.

 

Hayward’s lawyer, Jeffrey S. Jacobovitz, said prosecutors told him Hayward received “a negligible amount of money” from the company and that the payments were approved by lawyers.

 

The other defendants in the case have denied wrongdoing.

 

Hayward is a well-known veteran anchor for Channel 9 (WUSA) who has served on the boards of local community organizations. She has not appeared on the air since the complaint was filed Oct. 1 and the station placed her on administrative leave.

 

Her Web site, which features photographs of an Options board meeting she hosted at her home, has not been updated since Oct. 1.

 

In the document filed Monday, D.C. prosecutor Bennett Rushkoff — chief of the public advocacy section of the D.C. Office of the Attorney General — asked the judge to deny Hayward’s request to be removed from the case.

 

Rushkoff said Hayward’s attorney, after filing a motion to dismiss, filed an amendment that deleted key claims, including that she received no money in her role as board chairwoman, had no ownership interest in the two companies and did not profit from the alleged scheme.

 

“But having recently received information that Hayward was a paid consultant” for Exceptional Education Services, one of the two for-profit companies involved in the case, Rushkoff wrote, “the District is not in a position to concede that she received no compensation for her service to the school.”

 

Jacobovitz said he amended the documents after prosecutors informed him that Hayward had received some amount of money for serving on the company’s board. Initially, he said, prosecutors informed him that Hayward had not received compensation.

 

Rushkoff argued that even if Hayward didn’t realize that she was aiding the alleged scheme, she should still be held responsible for her actions. “Otherwise, the Attorney General will be powerless to proceed against officers and directors who do not understand the consequences of what they are doing,” he wrote.

 

Options serves about 400 at-risk teens in Northeast Washington. Anthony Herman, a lawyer representing the school, said that the allegations against Hayward “are deeply troubling and, if true, would be a serious breach of her fiduciary obligation to the school and the at-risk children it serves.”

 

 

Today's bombshell from the Washington Post's Emma Brown in her follow-up to the financial problems at Options PCS is that television anchor J.C. Hayward, during her time as board chair, received payment from one of the for-profit companies created by the school's executives.

 

How could she not realize that this was a serious conflict of interest?

 

Previously, I've discussed efforts to improve the governance of these alternative schools. Tom Nida, past chairman of the D.C. Public Charter School Board, came up with the idea of creating Highly Qualified Trustees. The concept is that individuals willing to serve on charter boards would receive formal training in areas such as finance and facility acquisition and would therefore be ready to join schools once openings on the governing bodies arise. Charter Board Partners, whose founders Carrie Irvin and Simmons Lettre I recently interviewed, offer classes specifically designed to improve the management of charters. However, becoming an HQT or enlisting the help of Charter Board Partners is strictly voluntary.

 

That time has passed. Washington D.C. will spend $540 million on charters in Fiscal year 2013. These schools of choice now educate almost 37,000 children, 44 percent of all kids attending public school in the nation's capital. The investment is way too high to leave oversight and accountability to unpaid volunteers who sit on boards because they may have particular expertise as bankers, lawyers, fundraisers, or accountants.

 

We desperately need to raise the bar and require that some form of good governance training be mandatory before individuals are given the keys to run multi-million dollar non-profits. Sure, this may make it slightly harder to find people to serve in this capacity. But I strongly contend that the integrity of our movement is worth the cost.

 

We need to add to this step an evaluation of governance as part of the PCSB's Performance Management Framework. Naomi Rubin DeVeaux, PCSB's Deputy Director, confirmed to me recently that the idea originally was to include a governance grade as part of the PMF but the notion was dropped. Making this subject a part of the PMF will provide a powerful incentive for schools to get it right.

 

There is no excuse for another case of financial irregularities such as occurred at Options for ever happening again. The PCSB has taken a positive step to preventing future incidents such as this by proposing new contract submission rules. The next move should be to require governance training by members of its boards.

 

 

A D.C. government agency paid a Chicago consulting firm $89,995 for one day of work at a recent city education conference, a fee that included a half-hour keynote speech, three 45-minute parent workshops and hundreds of copies of parenting books.

 

The Office of the State Superintendent of Education hired the firm without soliciting or considering other bids, according to an agency spokeswoman. The agency sponsored the Sept. 7 conference in an effort to reach out to parents, using D.C. tax dollars to pay the Chicago firm even as many speakers that day — as well as the keynote speaker at the same conference in 2012 — volunteered.

 

The payment to SPC Consulting is about $12,000 more than the average D.C. Public Schools teacher earns in a year, and is more than three times the “living wage” — $26,000 per year — that Wal-Mart would have been required to pay employees under a bill that Mayor Vincent C. Gray (D) vetoed this year. It’s also higher than the $50,000 that former D.C. schools chancellor Michelle Rhee, arguably the most widely recognized education figure in the country, charged for individual speaking appearances in 2011.

 

The superintendent’s office is responsible for citywide education policies, and the agency funnels federal and local funds to city schools. The agency selected SPC Consulting based on a recommendation by Chief of Staff Jose Alvarez, a top agency official who has played a leadership role during months of turnover, and who knew the firm and its founder from a previous job in Chicago.

 

Alvarez said the agency’s turnover left it in a last-minute scramble to put together the September conference, the second annual D.C. Parent and Family Engagement Summit. He said he is confident that SPC delivered quality services, but he acknowledged that the time crunch prevented his agency from conducting a competitive bidding process that would have ensured a fair deal for D.C. taxpayers. Agency officials said they have the authority to enter into such contracts without soliciting multiple bids.

 

“It wouldn’t happen under normal circumstances, and it’s not going to happen again,” Alvarez said, adding that the agency has started planning for next year’s parent summit. “I can guarantee you it could have been absolutely better, and we’re going to do it better.”

 

Alvarez said he suggested using SPC, but he said he was not directly involved in the decision to hire the firm. He previously worked for Chicago Public Schools, where he led a division that contracted with SPC to conduct parent workshops, according to public records.

 

SPC Consulting is headed by Sunny P. Chico, a former U.S. Education Department official who contracts with school systems. She is married to lobbyist Gery Chico, who ran for Chicago mayor in 2011 and serves as chairman of the Illinois State Board of Education.

 

SPC markets a package of parent empowerment workshops and Sunny Chico’s three-book series on parenting, “You: Your Child’s First Teacher.” The D.C. agency purchased the package as a centerpiece of the parent summit.

 

The District paid about $15,000 for 500 book sets, at $29.99 each. The city also paid $75,000 for Chico’s keynote address and for SPC employees to conduct three of the 28 “breakout sessions” offered to parents.

 

SPC charged $180 per person for a three-hour parent workshop in Chicago earlier this year, $70 less per person than the firm charged for the District conference. SPC officials said they had to charge the D.C. agency more to cover travel and lodging costs for Chico and two employees.

 

SPC Marketing Director Judy Razo defended the firm’s fees, calling them “below normal industry rates.” She said that SPC provided a training session for agency staff, as well as a two-hour book-signing session with Chico, even though those weren’t required by the contract.

 

“We’re trying to spread the message, and we understand that school districts have limited budgets,” said Razo, who said Chico was not available for an interview. “We want to impart wisdom, not just make a sale.”

 

During the event, Chico spoke of her family’s emigration from Cuba to the United States and issued a call for parents to become more involved in their children’s education, according to several people who attended. Some expressed shock when they learned what Chico and her firm were paid for the appearance.

 

“At the time, I thought it was pretty interesting, but I hadn’t thought of it in the context of this amount of money,” said D.C. Council member David Grosso (I-At Large). “I’m not sure what the draw was for that kind of money.”

 

Three presenters were paid fees of between $1,100 and $1,500, according to the superintendent’s office. An agency spokeswoman did not address why SPC was paid so much more than the others and did not respond to requests for the total cost of the conferences in 2012 and 2013.

 

Alvin Thornton, a senior administrator at Howard University, said he did not accept payment when he gave the keynote address at the parent summit in 2012.

 

“I don’t accept fees for speaking, especially at schools,” said Thornton, who as a professor and author focuses on the politics of educational reform. “I’ve never accepted speaking fees for 30 years, that’s just my principle.”

 

Fairfax County also holds an annual education summit. Many presenters at its 2013 summit volunteered, including the keynote speaker, Superintendent Karen Garza. Two presenters of “breakout sessions,” each of whom handed out hundreds of free books, were paid a combined $14,300. Most of those fees were covered by a $10,000 donation.

 

Athena Hernandez, a spokeswoman for the D.C. agency, stood by the payment to SPC.

 

“SPC delivered a quality program reflecting national best practices,” she said, adding that the three-book set is “a tool that parents can reference throughout their child’s academic career, and supports the Common Core standards.”